Peaceful Gains Newsletters

The suggested money market fund makes no sense

Alex — Mon, 30 Aug 2010 18:44:07 +0000

Question: You suggest “a good money market fund” yielding 2% per year. Where do I shop for that magical fund. All I have been able to find are 0.01% type funds. Any thoughts you can throw my way or put into newsletters?

Response: I want to clarify that I am just recommending a good money market fund. I am not recommending a “magical” fund with a 2% yield. As far as I know, no fund pays a yield this high right now.

The yield on money market funds changes over time. As you said, the current yield for many funds is 0.01%. However, historically, yields have been much higher — well above 3% and, even more historically, above 6%.

I use a service called TimerTrac to track the performance of my newsletters. When it comes to money market funds, TimerTrac does not allow me to specify a particular fund. Instead, they give me a choice of a couple of different hypothetical funds. One of these hypothetical funds has a constant return of 0%; another, a constant return of 2%.

Neither of the choices is very good, since yields change over time. However, I had to pick one. I know returns now are close to 0%. But since they can be much higher, I thought the 2% hypothetical fund is more appropriate. Thus, for the purpose of tracking my newsletter with TimerTrac, and for that purpose only, I am using a hypothetical money market fund with a constant 2% yield.

Gold strengthens

Alex — Sun, 29 Aug 2010 17:39:06 +0000

Gold (GLD) is even stronger this week. Though government bonds (TLT) are in a strong uptrend too, they could be overbought. The uptrend in the Malaysian market (EWM) is about as strong as it is in gold, but it’s clearly riskier. Corporate bonds (LQD) have a low risk, though, like government bonds, they could be overbought. Stay away from financials (XLF), Austria (EWO), and semiconductor stocks (SMH). (follow: facebook, rss.)

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Gold attractive again

Alex — Mon, 23 Aug 2010 01:46:58 +0000

Gold (GLD) is the only fund of the ones that we follow that’s in a stable uptrend. Though it is somewhat risky, so we recommend only putting some of the money into it. While gold has weakened a bit recently, it remains strong relative to other funds. Other funds with a high expected return include government bonds (TLT), as well as corporate bonds (LQD), and Malaysia (EWM), though all three are unstable. Stay away from Austria (EWO), financials (XLF), and energy (XLE). (follow: facebook, rss.)

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Back in bonds

Alex — Mon, 16 Aug 2010 02:13:01 +0000

With the fall in stocks, only bonds (F Fund) are trending up. In fact, their expected return has improved. On the other hand, small-cap stocks (S Fund), which we recommended last time, are doing very poorly. Stay away from all three stock funds. (follow: facebook, rss.)

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Real estate and more

Alex — Mon, 16 Aug 2010 02:11:35 +0000

Real estate (IYR) looks like the best pick this week. Government bonds (TLT), which we’re recommended over the past few weeks, are doing very well too, but not as well as real estate. Malaysia (EWM) is doing basically as well real estate, but has a lower risk. Gold (GLD) is also a good investment, but not as good as either real estate or Malaysia right now. The only fund with a lower risk than Malaysia is corporate bonds (LQD). Stay away from Japan (EWJ), Austria (EWO), and energy (XLE). (follow: facebook, rss.)

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Bonds stable

Alex — Sun, 08 Aug 2010 22:07:15 +0000

Government bonds (TLT) have the strongest long-term trend of the investments that we follow. Their uptrend has actually weakened slightly as they were flat during the past week. The Malaysian market (EWM) has a similarly strong uptrend though with a noticably higher risk; Malaysia has improved over the past week. Gold (GLD) is another good investment to consider. Corporate bonds (LQD), though they have a clearly lower expected return than government bonds, also have a lower risk. Stay away from biotech (IBB), financials (XLF), and Japan (EWJ). (follow: facebook, rss.)

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Strength in stocks

Alex — Sun, 01 Aug 2010 18:55:29 +0000

All three stock funds look strong now, with small-cap stocks (S Fund) leading the pack. Though foreign stocks (I Fund) have a lower expected return, they, together with bonds (F Fund), have a low risk. Large-cap stocks (C Fund) have the third highest expected return. (follow: facebook, rss.)

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Government and corporate bonds

Alex — Sun, 01 Aug 2010 18:50:51 +0000

Government bonds (TLT) are once again the best investment of the ones that we follow. The Malaysian market (EWM) has a clearly lower expected return and a higher risk. The expected return for real estate stocks (IYR) is lower still, and their risk is a lot higher. The only fund with a risk lower than that of government bonds is corporate bonds (LQD), and they have a decent expected return as well. Stay away from biotech (IBB), energy (XLE), and Japan (EWJ). (follow: facebook, rss.)

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Gov’t bonds still best investment

Alex — Mon, 26 Jul 2010 01:46:45 +0000

Government bonds (TLT), though a little weaker this week than they were last week, remain the best available investment. The Malaysian market (EWM) is trending up — while it is too risky at the moment, it’s visibly improved since last week. Corporate bonds (LQD) are also in an uptrend and have very little risk right now. Stay away from Austria (EWO), energy (XLE), and biotech (IBB). Though Austria has improved a little since last week, it remains the worst investment of the ones that we follow. (follow: facebook, rss.)

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“Very pleased”

Alex — Thu, 22 Jul 2010 19:37:58 +0000

Hi Alex,

I’ve recently started following Peaceful Gains contribution allocations, and I’ve been very pleased with its recommendations.

-R.M.